Report to Congressional Committees 

United States General Accounting Office 

GAO 

June 2003 MEDICAID AND 

TICKET TO WORK 

States’ Early Efforts to 

Cover Working 

Individuals with 

Disabilities 

GAO-03-587 
As of December 2002, 12 states had implemented Medicaid Buy-In programs 

under the authority of the Ticket to Work legislation, which was effective 

October 1, 2000, enrolling over 24,000 working individuals with disabilities. 

These states used the flexibility allowed by the legislation to raise income 

eligibility and asset limits as well as cost-sharing fees. 

Across the 12 states, income eligibility levels ranged from 100 percent of the 

federal poverty level (FPL) in Wyoming to no income limit in Minnesota, 

with 11 states setting income eligibility limits at twice the FPL or higher. In 

addition to increasing income and asset levels, these states required 

participants to buy in to the program by charging premiums, ranging from 

$26 to $82 a month, and copayments, generally ranging from $0.50 to $3 for 

office visits and prescription drugs. 

In detailed analysis of four states—Connecticut, Illinois, Minnesota, and 

New Jersey—GAO found that most Buy-In participants had prior insurance 

coverage by Medicaid and Medicare, few had prior coverage by private 

health insurance, and many earned low wages—most making less than $800 

per month. 

In commenting on a draft of this report, the Centers for Medicare & Medicaid 

Services noted that it expects to report in 2004 on its current study of states’ 

experiences in 2001 and 2002 with the Medicaid Buy-In programs. 

Enrollment and Income Eligibility Characteristics of 12 States with Ticket to Work Medicaid 

Buy-In Programs 

State Enrollment Buy-In 

start date Income limit as a percentage of FPLa

Missouri 8,461 July 2002 250% 

Minnesota 6,178 July 2001 No limit 

Indiana 3,318 July 2002 350% 

Connecticut 2,433 Oct. 2000 $75,000 per yearb

Pennsylvania 1,325 Jan. 2002 250% 

New Hampshire 968 Feb. 2002 450% 

New Jersey 551 Feb. 2001 250% (earned) and 100% (unearned) 

Kansas 489 July 2002 300% 

Illinois 323 Jan. 2002 200% 

Washington 144 Jan. 2002 220% 

Arkansas 65 Feb. 2001 250% 

Wyoming 3 July 2002 100% 

Source: State-reported data as of December 2002. 

a

The FPL for an individual in 2002 was $8,860 annually.

b

Connecticut’s income eligibility limit is not determined by the FPL. 

Over 7 million individuals with 

disabilities rely on medical and 

supportive services covered by 

Medicaid. However, if working-age 

individuals with disabilities desire 

to increase their self-sufficiency 

through employment, they could 

jeopardize their eligibility for 

Medicaid coverage, possibly 

leaving them without an alternative 

for health insurance. 

In an effort to help extend 

Medicaid coverage to certain 

individuals with disabilities who 

desire to work, the Congress 

passed the Ticket to Work and 

Work Incentives Improvement Act 

of 1999. This legislation authorizes 

states to raise their Medicaid 

income and asset eligibility limits 

for individuals with disabilities who 

work. States may require that 

working individuals with 

disabilities “buy in” to the program 

by sharing in the costs of their 

coverage—thus, these states’ 

programs are referred to as a 

Medicaid Buy-In. 

The act also required that GAO 

report on states’ progress in 

designing and implementing the 

Medicaid Buy-In. GAO identified 

states that operated Buy-In 

programs as of December 2002 and 

analyzed the income eligibility 

limits and cost-sharing provisions 

established by those states. GAO 

also assessed the characteristics of 

the Buy-In participants in four 

states that were among the most 

experienced in implementing the 

program. 

www.gao.gov/cgi-bin/getrpt?GAO-03-587.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Kathryn G. 

Allen at (202) 512-7118. 

Highlights of GAO-03-587, a report to the 

Senate Committee on Finance and the 

House Committee on Energy and 

Commerce 

June 2003

MEDICAID AND TICKET TO WORK 

States’ Early Efforts to Cover Working 

Individuals with Disabilities 
Page i GAO-03-587 Medicaid and Ticket to Work 

Letter 1

Results in Brief 4

Background 6

Individuals with Disabilities Had Lower Employment, Education, 

and Income—and More Insurance Coverage—than the General 

Population 14

States’ Buy-In Programs Expanded Eligibility and Increased Cost 

Sharing for More Workers with Disabilities 16

Buy-In Participants in Four States Generally Had Prior Medicaid 

Coverage and Worked in Low-Wage Jobs 27

Agency and State Comments 32

Appendix I Methodology for Developing Estimates and 

Characteristics of Working-Age Individuals with 

Disabilities 34 

Appendix II Comments from the Centers for Medicare & Medicaid 

Services 36 

Tables 

Table 1: Highlights of SSI and DI and Their Links to Medicare and 

Medicaid 9

Table 2: Comparison of Criteria for the Ticket to Work Buy-In and 

the BBA Option 12

Table 3: Enrollment and Eligibility Characteristics of 12 States With 

Ticket to Work Medicaid Buy-In Programs 17

Table 4: Twelve States’ Premium Requirements for Ticket to Work 

Medicaid Buy-In Programs 25

Table 5: Number of Buy-In Participants Reporting Other Sources of 

Health Care Coverage in Four States 29

Table 6: Average Monthly Income for Ticket to Work Buy-In 

Participants in Four States 31

Table 7: MEPS Sample and Estimated Population Sizes, 1997 and 

1998 35

Contents 
Page ii GAO-03-587 Medicaid and Ticket to Work 

Figures 

Figure 1: Selected Characteristics of Working-Age Individuals with 

Disabilities Compared with the Rest of the General 

Working-Age Population 15

Figure 2: Twelve States’ Medicaid Buy-In, SSI Work Incentive, and 

Spend-Down Income Eligibility Levels, as a Percentage of 

the FPL 20

Abbreviations 

ADL activities of daily living 

AHRQ Agency for Healthcare Research and Quality 

AWI average wage index 

BBA Balanced Budget Act of 1997 

CMS Centers for Medicare & Medicaid Services 

DI Social Security Disability Insurance 

EPE extended period of eligibility 

FPL federal poverty level 

IADL instrumental activities of daily living 

MEPS Medical Expenditure Panel Survey 

NHIS National Health Interview Survey 

SGA substantial gainful activity 

SSA Social Security Administration 

SSI Supplemental Security Income 

This is a work of the U.S. Government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. It may contain copyrighted graphics, images or other materials. 

Permission from the copyright holder may be necessary should you wish to reproduce 

copyrighted materials separately from GAO’s product. 
Page 1 GAO-03-587 Medicaid and Ticket to Work 

June 13, 2003 

The Honorable Charles E. Grassley 

Chairman 

The Honorable Max Baucus 

Ranking Minority Member 

Committee on Finance 

United States Senate 

The Honorable W.J. “Billy” Tauzin 

Chairman 

The Honorable John D. Dingell 

Ranking Minority Member 

Committee on Energy and Commerce 

House of Representatives 

During fiscal year 2000, over 7 million individuals with disabilities were 

enrolled in Medicaid, a federal-state program that finances health care for 

certain low-income Americans. For these individuals, Medicaid gives 

states the option to cover a wide array of medical and supportive services, 

including assistance with basic daily activities such as bathing, dressing, 

and eating. Depending on state Medicaid rules, individuals with disabilities 

who qualify for cash assistance from the Supplemental Security Income 

(SSI) or Social Security Disability Insurance (DI) programs may qualify for 

Medicaid. Nearly all individuals who qualify for SSI, which primarily 

covers low-income individuals who are disabled and have little or no work 

experience,1

 are assured eligibility for Medicaid coverage. Under DI, which 

assists people who worked but became disabled before their retirement 

age,2

 individuals are eligible for Medicare, a federal health insurance 

program for elderly individuals and some individuals with disabilities. 

Depending on their income and assets, individuals eligible for DI also may 

 1

SSI beneficiaries also include individuals who are blind or aged. References to the SSI 

program throughout this report address individuals who are disabled, not blind or aged, 

except where noted. 

2

DI beneficiaries also include certain other persons, including dependents and survivors of 

workers with disabilities. References to the DI program throughout this report address only 

workers with disabilities, not dependents or survivors. 

United States General Accounting Office

Washington, DC 20548 
Page 2 GAO-03-587 Medicaid and Ticket to Work 

qualify for Medicaid and thus receive coverage for some services not 

covered by Medicare, such as most outpatient prescription drugs. 

Because eligibility for Medicaid is generally linked to individuals’ income 

and assets, working-age individuals—aged 16 to 64—with disabilities who 

live in the community and work may jeopardize their Medicaid coverage 

due to earnings from work, possibly leaving them without an adequate 

health insurance alternative. The loss of Medicaid may be of particular 

concern for working-age individuals with disabilities because some 

benefits—including personal assistance with daily activities and adaptive 

equipment (such as household items modified for use by those with 

disabilities)—may not be available through other sources of health 

insurance. For example, private health insurance, such as that offered by 

employers, often does not cover personal assistance with basic daily 

activities or adaptive equipment. As a result, working-age individuals with 

disabilities may forgo employment and associated earnings in order to 

ensure their continued financial eligibility for Medicaid coverage of their 

health care needs. 

In an effort to help extend Medicaid coverage to certain individuals with 

disabilities who desire to work, the Congress passed the Ticket to Work 

and Work Incentives Improvement Act of 1999 (Pub. L. No. 106-170, 113 

Stat. 1860). This legislation, effective October 1, 2000, authorizes states to 

raise their Medicaid income and asset limits for individuals with 

disabilities who work. States may require that working individuals with 

disabilities “buy in” to the Medicaid program by sharing in the costs of 

their coverage—therefore, such states’ programs are referred to as a 

Medicaid Buy-In. A Medicaid Buy-In program is intended to assist 

individuals by allowing them to work and thereby increase their 

independence and self-sufficiency, while at the same time enabling them 

to obtain or maintain health care coverage. The act directed that we report 

to the Congress on characteristics of individuals with disabilities, 

including their health care costs and health insurance coverage, as well as 

states’ progress in designing and implementing the Medicaid Buy-In 

program. Accordingly, as agreed with the committees of jurisdiction, we 

examined 
Page 3 GAO-03-587 Medicaid and Ticket to Work 

1. characteristics of working-age individuals with disabilities compared 

with the rest of the working-age U.S. population with regard to 

employment, education, income, health insurance status, and health 

care expenditures, 

2. how states that have chosen to establish a Ticket to Work Medicaid 

Buy-In program have designed their programs, including income 

eligibility limits and any cost-sharing provisions, and 

3. characteristics of selected states’ Ticket to Work Medicaid Buy-In 

participants, including previous health insurance coverage and income 

from employment. 

To compare characteristics of working-age individuals with disabilities to 

individuals in the rest of the working-age population, we analyzed data 

available from the Agency for Healthcare Research and Quality’s (AHRQ) 

Medical Expenditure Panel Survey (MEPS)—the survey of individuals’ 

demographics, employment, health characteristics, and medical spending 

(household component) for 1997 and 1998, the most recent years for 

which relevant data were available. We analyzed data from MEPS because 

such data provided both a way to identify working-age individuals with 

disabilities and details on their health care expenditures. Our estimates 

based on MEPS resulted in a relatively broad definition of disability for 

individuals aged 16 to 64 because it included individuals who reported one 

or both of the following conditions: (1) needing help or supervision in 

performing activities of daily living (ADL) (such as bathing or dressing) or 

instrumental activities of daily living (IADL) (such as taking medications 

or preparing meals) because of an impairment or a physical or mental 

health problem,3

 or (2) being completely unable to work at a job, do 

housework, or go to school. For individuals meeting this definition of 

disability, we compared characteristics such as income level, insurance 

status, and health care expenditures to those of the rest of the U.S. 

population aged 16 to 64. AHRQ collected these data prior to 

 3

MEPS identifies ADLs as basic physical activities such as bathing, dressing, or getting 

around the house and identifies IADLS as cognitive or social functions such as using the 

telephone, paying bills, taking medications, preparing light meals, doing laundry, or going 

shopping. MEPS offers a relatively expansive definition of disability in that it does not 

distinguish the number of ADLs or IADLs with which an individual may require assistance. 

Other national surveys that provided details on the number of ADLs and IADLs with which 

an individual required assistance—such as the National Health Interview Survey (NHIS) 

Disability Supplement—were based on older data—1994 and 1995. As of March 2003, the 

NHIS Disability Supplement had not been updated. 
Page 4 GAO-03-587 Medicaid and Ticket to Work 

implementation of Ticket to Work Medicaid Buy-In programs and thus the 

data do not reflect any effects of states’ Buy-In programs. (App. I provides 

detailed information on our methodology for developing estimates and 

characteristics of working-age individuals with disabilities.) To examine 

the designs of the Buy-In programs for states that had chosen to establish 

a Buy-In program and whose programs were in effect as of December 

2002, we reviewed state Medicaid plan amendments describing the BuyIns, analyzed published state documents, and conducted telephone 

interviews with state Medicaid officials. Additionally, we analyzed the BuyIn implementation experience of four states—Connecticut, Illinois, 

Minnesota, and New Jersey—that were among the most experienced in 

implementing the program. At the federal level, we interviewed officials at 

the Centers for Medicare & Medicaid Services (CMS), which oversees 

states’ Medicaid programs, to gather information about states’ programs. 

We reviewed documents, including federal laws and reports, related to the 

state Buy-In programs. We conducted our work from May 2002 through 

June 2003 in accordance with generally accepted government auditing 

standards. 

Compared with the rest of the working-age U.S. population, the estimated 

6.7 million working-age individuals with disabilities were more likely to be 

not working, have less education, and have incomes below the federal 

poverty level (FPL). However, they were less likely to be uninsured than 

the rest of the working-age U.S. population—just 9 percent of those with 

disabilities reported being uninsured, compared with 15 percent of the rest 

of the working-age population. Nearly half of individuals with disabilities 

who reported having health insurance obtained coverage through public 

sources, such as Medicare and Medicaid. Annual average health care 

expenditures for working-age individuals with disabilities were about five 

times the expenditures for other working-age individuals. 

Of the 12 states that had opted to implement Medicaid Buy-In programs 

under the Ticket to Work authority, all expanded eligibility to include 

working individuals with higher incomes or more assets than generally 

allowed under the states’ traditional Medicaid programs. As of December 

2002, the 12 states had enrolled over 24,000 working individuals with 

disabilities. Enrollment ranged from a low of 3 individuals in Wyoming to 

8,461 in Missouri. Eleven of the 12 states set Buy-In eligibility limits for 

income at twice the FPL or higher—$17,720 per year for an individual in 

2002. Additionally, the states’ Buy-In programs generally allowed 

participants to keep more assets, such as retirement accounts and medical 

savings accounts, than allowed in states’ traditional Medicaid programs. 

Results in Brief 
Page 5 GAO-03-587 Medicaid and Ticket to Work 

The higher income eligibility and asset levels set by states for the Buy-In 

programs provided additional opportunities—particularly for DI-eligible 

individuals, who had prior working experience before becoming 

disabled—to secure and maintain Medicaid coverage. In addition to 

increasing income and asset levels, all states took advantage of the 

statute’s flexibility by requiring participants to buy in to the program by 

paying premiums or copayments. Generally, states assessed premiums for 

individuals with incomes above the FPL and adjusted premiums upward as 

income increased. Across the 10 states that charged premiums in 2002, the 

average monthly premiums paid ranged from $26 in New Hampshire to $82 

in Indiana. Additionally, the percentage of participants who were charged 

premiums varied significantly across the states, from 12 percent of 

participants in Connecticut to all or nearly all participants in Illinois, 

Pennsylvania, Washington, and Wyoming. 

Our more detailed analysis of four states that were among the most 

experienced in implementing this program found that most Buy-In 

participants had prior insurance coverage by Medicaid and Medicare, few 

had prior coverage by private health insurance, and many earned low 

wages while participating in the Buy-In. More than half of the Buy-In 

participants in these four states had previous Medicaid coverage. Those 

Buy-In participants who had switched from another Medicaid eligibility 

category generally did so because they were able to increase their income 

and assets and maintain their Medicaid eligibility. Many Buy-In 

participants in these states were eligible for health care coverage through 

the Medicare program. However, Medicaid eligibility gave these 

individuals additional benefits that were not offered under Medicare, such 

as outpatient prescription drugs and personal care services. Few 

participants—less than 10 percent of participants in any of the four 

states—reported having employer-sponsored coverage at the time of their 

enrollment into the Medicaid Buy-In programs. Available employment data 

showed that participants generally were working in low-wage jobs—most 

making less than $800 per month—although they could earn more and still 

retain Buy-In Medicaid benefits. These four states, however, had little 

information regarding the extent to which the Buy-In programs fostered 

employment among individuals with disabilities. 

In its comments on a draft of this report, CMS noted it is conducting an 

extensive study of states’ experiences with the Medicaid Buy-In programs 

and expects to issue a report in 2004. CMS and 11 of the 12 states in our 

sample also provided technical comments, which we incorporated as 

appropriate. 
Page 6 GAO-03-587 Medicaid and Ticket to Work 

Eligibility for benefits under SSI, DI, Medicare, and Medicaid programs for 

individuals with disabilities is determined in part on whether an individual 

has a disability as defined in the Social Security Act.4

 For purposes of 

these programs, a person is disabled if he or she has a medically 

determined physical or mental impairment that (1) has lasted or is 

expected to last at least 1 year or result in death and (2) prevents the 

person from engaging in substantial gainful activity (SGA). As of January 

2003, SGA is defined as countable earnings—generally gross earnings less 

the cost of items that, because of the impairment, a person needs to 

work—of more than $800 per month.5

 The Social Security Administration’s 

(SSA) interpretation of disability specifies that for a person to be 

determined to be disabled, the impairment must be of such severity that 

the person not only is unable to do his or her previous work but, 

considering the person’s age, education, and work experience, is unable to 

do any other kind of substantial work that exists in the national economy.6

The Ticket to Work and Work Incentives Improvement Act of 1999 allowed 

states to expand the availability of Medicaid coverage for individuals with 

 4

The DI program and SSI program are authorized under titles II and XVI, respectively, of 

the Social Security Act. The definition of disability for the DI program is in section 223(d) 

of the Social Security Act. The definition of disability for the SSI program is in section 

1614(A)(3). In all material respects, the two definitions are similar and have been 

interpreted by the Social Security Administration (SSA) similarly. 

5

Under the Social Security Act, the Commissioner of Social Security has the authority to set 

the SGA level for individuals who have disabilities other than blindness. SSA has increased 

the SGA level several times over the past decade, to $500 per month in 1990 and to $700 per 

month in July 1999. In December 2000, SSA finalized a rule calling for the annual indexing 

of the nonblind SGA income limit to the average wage index (AWI) and on this basis 

increased the SGA income limit to $780 in January 2002. The SGA income limit for 

individuals who are blind is set by statute and indexed to the AWI. For 2002, the SGA 

income limit for blind individuals was $1,300 of countable earnings. In January 2003, the 

SGA limit increased to $800 per month for nonblind individuals and to $1,330 per month for 

blind individuals. To calculate countable earnings for SGA, SSA deducts from gross 

earnings the cost of items that, because of the impairment, a person needs to work (for 

example, attendant care services performed in a work setting, wheelchairs, or Braille 

devices). 

6

SSA uses a series of steps to evaluate the applicant’s level of disability. As part of the 

steps, SSA compares the applicant’s condition to a Listing of Impairments that describes 

medical conditions that are severe enough to prevent a person from engaging in SGA. If an 

applicant’s impairment is cited in the Listing of Impairments or the applicant’s impairment 

is as severe as or more severe than those impairments in the Listing of Impairments, then 

the applicant would be considered disabled and awarded benefits without any further 

evaluation to determine whether he or she has vocational limitations that, when combined 

with the medical impairment, prevents work. 

Background 
Page 7 GAO-03-587 Medicaid and Ticket to Work 

disabilities who work, even though they earn more than the SGA level. 

States that implement Ticket to Work Buy-In programs may consider as 

disabled those individuals who, except for the fact that they are earning 

more than the SGA $800 monthly amount, otherwise would meet the 

Social Security Act definition of disabled. 

Individuals with disabilities become eligible for Medicaid in a variety of 

ways but primarily through SSI or DI eligibility (see table 1). Individuals 

with disabilities, however, must also meet Medicaid income and asset 

requirements in order to obtain Medicaid coverage. Both the SSI and DI 

programs contain work incentive provisions designed to assist individuals 

with disabilities to achieve gainful employment while retaining some 

eligibility for health care coverage.7

Individuals receiving SSI also are assured eligibility for Medicaid in 39 

states and the District of Columbia. The remaining 11 states (known as 

209(b) states) may use different standards for disability, income, or assets; 

thus, SSI beneficiaries in these 11 states may not have assured eligibility 

for Medicaid.8

 Work incentives under SSI allow individuals to (1) have 

their SSI cash benefits gradually reduced as earnings increase, rather than 

having cash benefits removed entirely once earnings exceed the SGA limit, 

and (2) maintain their Medicaid coverage up to an income limit that varies 

 7

These work incentive provisions can help individuals pay for services or items that they 

need in order to work or enable individuals to maintain or increase their cash benefits until 

they are stable in employment. Other work incentives allow individuals with disabilities to 

recover impairment-related work expenses, such as attendant care services and 

transportation costs. 

8

Under Section 1902(f) of the Social Security Act, 42 U.S.C. 1396a(f), states may use their 

1972 state assistance eligibility rules in determining Medicaid eligibility for individuals with 

disabilities, rather than SSI eligibility rules, and 11 states do so. The 11 states are 

Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New Hampshire, North Dakota, 

Ohio, Oklahoma, and Virginia. These states are often referred to as 209(b) states because 

the origin of this authority is §209(b) of the Social Security Amendments of 1972. The 

209(b) states’ definitions of disability or their income/resource standards for Medicaid 

eligibility tend to be more restrictive than those for SSI but can be the same as or more 

liberal. If a state’s 209(b) rules are more restrictive, it must also allow individuals to spend 

down into Medicaid eligibility by deducting incurred medical care expenses from income. 

Individuals with 

Disabilities Qualify for 

Medicaid Primarily 

through SSI or DI 

Eligibility 

SSI 
Page 8 GAO-03-587 Medicaid and Ticket to Work 

across the states (from $15,049 (170 percent of the FPL) in Arizona to 

$39,228 (443 percent of the FPL) in New Hampshire as of 2002).9

Individuals receiving DI also may become eligible for Medicaid under 

certain circumstances. By virtue of their DI disability determination, they 

meet one of the categorical eligibility requirements for Medicaid.10

However, they must also meet Medicaid’s income and asset requirements 

as defined by each state. DI beneficiaries can “spend down” their income 

on medical expenses in order to meet state-determined income limits for 

the medically needy eligibility category, if a state provides this optional 

coverage.11 While DI beneficiaries receive health care coverage through 

Medicare,12 eligibility for the medically needy category provides Medicaidcovered services that are not covered by Medicare, such as most 

outpatient prescription drugs. Work incentives under DI are structured 

such that if an individual’s work activity increases to a level where he or 

she is no longer deemed disabled, the individual loses DI eligibility, and in 

turn, Medicaid eligibility. 

 9

In contrast to other Medicaid income eligibility thresholds, which are usually set by the 

state within federal guidelines, SSA sets the income threshold for SSI-related Medicaid 

eligibility annually. The income threshold for a particular state is based on the current SSI 

cash benefit in each state and a state’s per capita Medicaid expenditures. If an SSI 

beneficiary has gross earnings higher than the threshold amount for his or her state, SSA 

can calculate an individual threshold amount if he or she has medical or impairmentrelated work expenses above the state amount. 

10States receive federal Medicaid matching funds for health care provided to certain 

individuals meeting broad federal requirements for eligibility, including categorical, 

income, resource, immigration status, and residency requirements. The categorical 

requirement includes individuals who fall into specified categories, which can be classified 

into five broad coverage groups: individuals with disabilities, children, pregnant women, 

individuals in families with dependent children, and the elderly. 

11The medically needy category refers to individuals who meet certain categorical 

requirements for Medicaid eligibility—for example, children, individuals with dependent 

children, and individuals who are aged, disabled, or pregnant—and have incurred medical 

expenses to the point where their income, less the medical expenses incurred, makes them 

eligible for Medicaid. As of November 2002, 35 states and the District of Columbia opted to 

cover Medicaid beneficiaries under the medically needy eligibility category. 

12After they have received DI cash benefits for 24 months, DI beneficiaries are entitled to 

Medicare part A coverage and are eligible to enroll in part B. Medicare part A helps cover 

inpatient care in hospitals, critical access hospitals, and skilled nursing facilities. It also 

covers hospice care and some home health care. Medicare part B helps cover physician 

services and outpatient hospital care. 

DI 
Page 9 GAO-03-587 Medicaid and Ticket to Work 

Table 1: Highlights of SSI and DI and Their Links to Medicare and Medicaid 

Program SSI DI 

General 

description 

• Means-tested income assistance program for 

disabled, blind, or aged individuals with or without 

prior participation in the labor force. 

• Federal income limit of $545 in countable income 

per month for an individual ($817 for a couple) and 

$2,000 in assets for a single adult ($3,000 for a 

couple) as of 2002.a

• SSI cash benefits are based on a beneficiary’s 

countable income, living arrangements, and state 

of residence. Most states pay some beneficiaries 

an additional amount referred to as a “state 

supplement.” The amounts and qualifications for 

these state supplements vary by state. 

• Income assistance program for individuals who have 

lost their ability to work as a result of a severe, longterm disability and have worked long enough in Social 

Security-covered employment and during a specified 

time period to meet program requirements.b

• No federal income or asset limit for participation in the 

DI program, other than meeting the SGA earnings limit 

to be determined disabled ($800 per month in 2003). 

• The DI cash benefits are based on a beneficiary’s 

lifetime average earnings that were covered by Social 

Security. The payment amount is adjusted each year 

to account for changes in the cost of living. 

Number of 

working-age 

individuals 

covered 

• In 2001, 3.8 million individuals aged 18-64 received 

SSI benefits. 

• In 2001, 5.3 million individuals through age 64 

received DI benefits because of a disability they 

incurred. 

Link to Medicaid 

and Medicare 

• In 39 states and the District of Columbia, SSI 

eligibility assures an individual’s eligibility for 

Medicaid benefits. 

• Eleven states use more restrictive disability, 

income, or asset requirements than SSI for 

Medicaid eligibility.c

• No direct link to Medicare. 

• Individuals eligible for DI meet the Medicaid categorical 

designation for disability, but they also must meet the 

Medicaid income and asset requirements as defined 

by the state. DI individuals may spend down their 

income and assets and thus become eligible for 

Medicaid under the medically needy eligibility category, 

if a state uses this optional coverage category. 

• Entitled to part A Medicare coverage after they have 

received DI cash benefits for 24 months.d

Program work 

incentives and 

effect on health 

coverage 

Under section 1619 (a),(b) of the Social Security Act, 

42 U.S.C. 1382h(a),(b), disabled SSI beneficiaries 

who work may be eligible for continued Medicaid 

coverage through two work incentive programs: 

• Section 1619(a): Allows disabled beneficiaries to 

continue to receive SSI cash payments even when 

earnings exceed the SGA ($800 per month in 

2003). However, as earnings increase, the SSI 

cash payment decreases until earnings completely 

replace cash benefits. There is no effect on 

Medicaid coverage as long as an individual 

receives SSI cash benefits. 

• Section 1619(b)—SSI work incentive:e Allows 

disabled beneficiaries to continue to receive 

Medicaid coverage even when they no longer 

qualify for SSI cash benefits. Medicaid coverage 

continues until earnings reach a threshold amount 

that varies by state. In contrast to other Medicaid 

income eligibility thresholds, which are usually set 

by the state within broad federal parameters, SSA 

sets the income threshold for SSI-related Medicaid 

eligibility, which varies from state to state on the 

basis of each state’s current SSI cash benefit (the 

f d l b fi d l ) d

DI beneficiaries who work may retain eligibility for 

Medicaid as long as their medical disability continues and 

they continue to meet a state’s Medicaid income and 

asset requirements. 

Medicare coverage for DI beneficiaries who work may be 

retained under the following circumstances: 

• Trial work period: Allows DI beneficiaries to have a trial 

work period of 9 months (not necessarily consecutive) 

within a 60-month rolling period during which they can 

earn any amount without affecting their DI benefits. 

Medicare part A coverage continues for the 9-month 

period. 

• Extended period of eligibility (EPE): Immediately after 

the trial work period, DI beneficiaries enter a 36-month 

EPE as long as medical disability continues. Cash 

benefits continue for the first 3 months of this period 

regardless of the earnings level. For the remaining 33 

months, DI cash benefits are paid only in months in 

which countable earnings were less than SGA ($800 

per month in 2003). For those who earn at or above 

SGA level after the 36-month EPE, part A Medicare 

coverage continues for at least 7 years and 9 months 
Page 10 GAO-03-587 Medicaid and Ticket to Work 

Program SSI DI 

federal benefit and any state supplement) and a 

state’s per capita Medicaid expenditures.f

 Across 

the 50 states and the District of Columbia, 

Medicaid eligibility for SSI-related individuals in 

2002 ranged from 170 percent of the FPL in 

Arizona to 443 percent of the FPL in New 

Hampshire. 

(including the 36 months of the EPE), unless the 

person is determined to be not disabled for a reason 

other than earning the SGA level. 

With the trial work period and the EPE, DI beneficiaries 

who work, and continue to have a medical disability, are 

entitled to at least 8-1/2 years of Medicare part A 

coverage following the start of a trial work period.g

 

Source: SSA. 

Note: GAO analysis of SSA documents, as of December 2002. 

a

Not all income or assets are counted in order to calculate “countable” income or assets. Income 

exclusions include $20 per month of most income, $65 per month of wages and one-half of wages 

over $65, food stamps, and home energy and housing assistance. Assets excluded are the home a 

person lives in; a car, depending on its use or value; certain burial spaces and burial funds up to 

$1,500; and life insurance with a face value of up to $1,500. 

b

To be eligible for DI benefits, workers (except those who are blind) also must meet a test of 

substantial recent covered work, which means that workers aged 31 and older must have been in 

Social Security covered employment for at least 20 quarters of the 40 calendar quarters ending with 

the quarter in which the disability began. Workers disabled before age 31 may qualify for benefits 

under a special insured status requirement. 

c

In identifying eligible individuals with disabilities, states generally are required to use the SSI eligibility 

requirements; however, they also have the option to use their January 1972 state assistance eligibility 

rules under section 1902(f) of the Social Security Act, which tend to be more restrictive than SSI 

rules. If a state’s 209(b) rules are more restrictive, it must also allow individuals to spend down into 

Medicaid eligibility by deducting incurred medical care expenses from income. As of 2002, 11 states 

had elected this option: Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New Hampshire, 

North Dakota, Ohio, Oklahoma, and Virginia. 

d

Medicare part A helps cover inpatient care in hospitals, critical access hospitals, and skilled nursing 

facilities. It also covers hospice care and some home health care. Medicare part B helps cover 

physician services and outpatient hospital care. DI beneficiaries are eligible to enroll in part B 

Medicare coverage after they have received DI cash benefits for 24 months. 

e

Throughout this report, we refer to individuals who qualify for Medicaid under 1619(b) as participants 

in the SSI work incentive program. 

f

If an SSI beneficiary has gross earnings higher than the threshold amount for his or her state, SSA 

can calculate an individual threshold amount if he or she has medical or impairment-related work 

expenses above the state amount. 

g

Under section 1818A of the Social Security Act, a disabled individual who has lost entitlement to 

premium-free Medicare part A solely because of SGA may be able to enroll in part A as long as the 

disability continues. The individual is responsible for paying the premiums. 
Page 11 GAO-03-587 Medicaid and Ticket to Work 

The Ticket to Work Medicaid Buy-In builds on an earlier effort to expand 

Medicaid eligibility for individuals with disabilities who desire to work. 

Through the Balanced Budget Act of 1997 (BBA) (Pub. L. No. 105-33, 111 

Stat. 251), the Congress gave states the option of implementing a coverage 

category for working individuals with disabilities. For these individuals, 

the BBA authorized states to extend Medicaid coverage to those who meet 

the SSI definition of disability and exceed the SSI income eligibility limit 

but whose income remains under 250 percent of the FPL. States electing 

the BBA option may require beneficiaries to pay premiums or may use 

other cost-sharing provisions as long as they are set on a sliding scale 

based on income. As of December 2002, 12 states had implemented a BBA 

option for working individuals with disabilities.13

The Ticket to Work Medicaid Buy-In legislation expands the availability of 

Medicaid coverage for individuals with disabilities who desire to work by 

allowing them to gain or maintain Medicaid eligibility as they enter the 

workforce or to increase their earnings if they are in the workforce. The 

Ticket to Work Buy-In builds on the BBA option by giving states unlimited 

flexibility to set higher income and asset levels for two new eligibility 

groups—Basic Coverage Group and Medical Improvement Group—for 

working individuals with disabilities. (For a comparison of the two 

programs, see table 2.) 

 13States with the BBA option as of December 2002 included Alaska, California, Iowa, Maine, 

Mississippi, Nebraska, New Mexico, Oregon, South Carolina, Utah, Vermont, and 

Wisconsin. 

Medicaid Buy-In Program 

Designed to Expand 

Coverage for Working 

Individuals with 

Disabilities 
Page 12 GAO-03-587 Medicaid and Ticket to Work 

Table 2: Comparison of Criteria for the Ticket to Work Buy-In and the BBA Option 

Criteria Ticket to Work Buy-In BBA Option 

Who can be covered Basic Coverage Group: Working disabled individuals, aged 

16–64 (SSI disability definition).a 

Medical Improvement Group: Employed Individuals losing 

Basic Coverage because they no longer meet the SSI disability 

definition, but still have severe impairment. 

Working disabled individuals of any age 

(SSI disability definition).a

Income standard For both the Basic Coverage and Medical Improvement 

groups, the state establishes its own standard or chooses not 

to have an income standard. 

Up to 250 percent of the FPL, and 

unearned income must meet SSI income 

test.b

Asset standard For both the Basic Coverage and Medical Improvement 

groups, the state establishes its own standard or chooses not 

to have one. 

SSI asset standard ($2,000/person, 

$3,000/couple).b

Premiums and cost 

sharing 

For both the Basic Coverage and Medical Improvement 

groups, the state may require premiums and other cost-sharing 

mechanisms on an income-based sliding scale. 

For annual incomes less than 450 percent of the FPL, state 

may charge premiums and use other cost-sharing mechanisms 

of up to 7.5 percent of income. 

States must charge the highest amount of premium under the 

states’ premium structure for those with adjusted gross annual 

incomes exceeding $75,000. 

State may require premiums and other 

cost-sharing mechanisms on an incomebased sliding scale. 

States using this 

option as of 

December 2002c

Basic Coverage Group: Arkansas, Connecticut, Illinois, 

Indiana, Kansas, Minnesota, Missouri, New Hampshire, New 

Jersey, Pennsylvania, Washington, Wyoming 

Medical Improvement Group: Connecticut, Indiana, Missouri, 

Pennsylvania, Washington 

Alaska, California, Iowa, Maine, 

Mississippi, Nebraska, New Mexico, 

Oregon, South Carolina, Utah, Vermont, 

Wisconsin 

Source: CMS. 

Note: GAO analysis of CMS documents, as of December 2002. 

a

For those individuals who have not been determined disabled by SSA, the state must do a disability 

determination to ensure that the individual would meet the definition of disability under the SSI 

program. The disability test must be identical to the SSI or DI disability test except that employment 

activity, earnings, and SGA cannot be considered in determining whether the individual meets the 

definition of disability. 

b

Under usual eligibility rules, states are required to use the processes used by SSI and the former Aid 

to Families with Dependent Children program in determining eligibility for Medicaid. However, section 

1902(r)(2) of the Social Security Act, 42 U.S.C. 1396a(r)(2), allows states to disregard (not include) 

additional kinds and amounts of income and assets beyond what is allowed under these programs. 

For example, a state could disregard a select amount of earned or unearned income or income used 

for home maintenance or repair. 

c

Florida received approval for a Ticket to Work Medicaid Buy-In program in June 2002; however, the 

state had not implemented the program as of December 31, 2002. Arizona received approval for a 

Ticket to Work Medicaid Buy-In program in December 2002. The program was implemented in 

January 2003, which was after the cut-off date of December 2002 for inclusion in this study. 
Page 13 GAO-03-587 Medicaid and Ticket to Work 

The Basic Coverage Group allows states to cover people aged 16 to 64 

who, except for the amount of their earned income, would be eligible to 

receive SSI benefits. States may establish their own income and asset 

standards or elect to have no standards at all.14 As with the BBA option, 

states electing the Basic Coverage Group may require participants to pay 

monthly premiums or may impose other cost-sharing mechanisms if they 

are set on an income-based sliding scale. However, for individuals with 

annual incomes less than 450 percent of the FPL, states may not impose 

premiums that exceed 7.5 percent of income. Additionally, if the 

individual’s adjusted gross income for federal income tax purposes 

exceeds $75,000, the state must require the individual to pay the highest 

amount of premiums that an individual would be required to pay under the 

state’s premium structure, although a state is allowed to subsidize this cost 

with its own funds. While the Basic Coverage Group Buy-In participants 

must have earnings, the Ticket to Work legislation does not specify a 

minimum level of employment for this group. Since states cannot adopt 

rules defining employment for this group that are more restrictive than 

those in federal law, states cannot establish requirements such as 

minimum earnings or hours worked. 

The Medical Improvement Group allows states to cover working 

individuals who lose Medicaid eligibility under the Basic Coverage Group 

because their conditions have improved to the point that they no longer 

meet the SSI definition of disability but still have “a severe, medically 

determinable impairment.” The same premium requirements apply as for 

the Basic Coverage Group. If a state elects to cover the Medical 

Improvement Group, it must also cover the Basic Coverage Group. While 

the Ticket to Work legislation does not set an employment standard for the 

Basic Coverage Group, it provides a definition and also allows a state to 

define employment for the Medical Improvement Group. According to the 

legislation, an individual qualifying for the Medical Improvement Group is 

considered employed if the individual is earning at least the minimum 

wage and working at least 40 hours per month. Alternatively, a state may 

 14If states establish income and asset standards, SSI income and asset methodologies are 

used to determine eligibility, including the SSI earned income disregard of $65, plus onehalf of remaining earnings. Other income disregards include $20 of unearned income, and 

certain impairment-related work expenses, such as certain attendant care services, 

transportation costs, and medical devices. The SSI asset methodology allows for exclusion 

of such things as the home a person lives in, a car depending on its use or value, and life 

insurance valued up to $1,500. 
Page 14 GAO-03-587 Medicaid and Ticket to Work 

use hours of work, wage levels, or other measures to define employment if 

the Secretary of Health and Human Services approves the definition. 

Compared with the rest of the working-age population, the estimated 6.7 

million working-age individuals with disabilities nationwide were more 

likely to be not working, have less education, and have incomes below the 

FPL. Specifically, 82 percent of working-age individuals with disabilities, 

or about 5.5 million individuals, reported that they were not working. (See 

fig. 1.) Nearly three-fourths of working-age individuals with disabilities 

reported they had a high school education or less. Furthermore, these 

individuals were nearly three times more likely than individuals without 

disabilities to have incomes below the FPL. At the same time, individuals 

with disabilities were less likely to be uninsured compared with the rest of 

the working-age U.S. population, with just 9 percent of those with 

disabilities reporting being uninsured, compared with 15 percent for the 

rest of the working-age population. Nearly half of individuals with 

disabilities who reported having health insurance obtained coverage 

through public sources, such as Medicaid and Medicare. 

Individuals with 

Disabilities Had 

Lower Employment, 

Education, and 

Income—and More 

Insurance Coverage—

than the General 

Population 
Page 15 GAO-03-587 Medicaid and Ticket to Work 

Figure 1: Selected Characteristics of Working-Age Individuals with Disabilities 

Compared with the Rest of the General Working-Age Population 

Note: GAO analysis of AHRQ’s MEPS household component, 1997 and 1998. 

a

Individuals reported income levels from either 1997 or 1998. The FPL in 1997 was $7,890 for an 

individual; the FPL in 1998 was $8,050 for an individual. 

b

Individuals reported being uninsured during the entire year for 1 of the 2 years. 

c

Public health insurance coverage primarily includes Medicaid and Medicare. 

0 20 40 60 80 100

Individuals with disabilities

General population

Source: AHRQ.

10

29

Income below 

FPLa

50

73 High school 

education or less

22

82 Not working

Percentage

6

49 Covered by public 

health insurancec

Uninsuredb

15

9
Page 16 GAO-03-587 Medicaid and Ticket to Work 

Working-age individuals with disabilities were far more likely to have 

public health coverage than working-age individuals in the general 

population. Specifically, working-age individuals with disabilities were 

about eight times more likely to have public health insurance coverage 

than other working-age individuals. Generally, the lower the income level, 

the more likely an individual with disabilities was to have public health 

insurance coverage. For example, 75 percent of individuals with 

disabilities who had incomes below the FPL had public health insurance, 

while fewer than 20 percent of those with incomes at or exceeding 400 

percent of the FPL had public coverage. 

The extent of their health care costs underscores the need for individuals 

with disabilities to maintain some type of health insurance coverage to 

help cover the costs of their care. Health care expenditures for workingage individuals with disabilities were about five times the expenditures for 

other working-age individuals, annually averaging about $7,600 and $1,500, 

respectively.15

The 12 states that opted to implement the Ticket to Work Medicaid Buy-In 

program as of December 2002 set income and asset levels for eligibility 

that provided new opportunities for working individuals with disabilities 

to secure and maintain Medicaid coverage. DI-eligible individuals 

benefited particularly because states’ broader eligibility categories under 

the Buy-In allowed individuals to become eligible for Medicaid without 

spending down their incomes and to remain eligible when their incomes 

rose to higher levels. In addition to expanding income eligibility and asset 

limits, all states took advantage of the flexibility of the statute to charge 

premiums or copayments to ensure that Buy-In participants shared in the 

cost of their health care coverage. 

Across the 12 states that opted to implement Ticket to Work Medicaid 

Buy-In programs, all set eligibility requirements that expanded eligibility 

for working individuals with higher incomes or more assets than usually 

allowed under their Medicaid programs. As of December 2002, the number 

of Buy-In participants for the 12 states totaled 24,258, ranging from 3 

participants in Wyoming to almost 8,500 participants in Missouri. (See 

 15In our MEPS analysis of health care expenditures of individuals with disabilities, we did 

not find a difference in average expenditures between those in and out of the workforce. 

States’ Buy-In 

Programs Expanded 

Eligibility and 

Increased Cost 

Sharing for More 

Workers with 

Disabilities 

Twelve States Expanded 

Medicaid Eligibility Levels 

for Working Individuals 

with Disabilities 
Page 17 GAO-03-587 Medicaid and Ticket to Work 

table 3.) Eleven of the 12 states set Buy-In eligibility limits for income at 

twice the FPL or higher—or $17,720 per year for an individual in 2002—

thereby expanding opportunities for individuals to secure and maintain 

Medicaid coverage. Buy-In programs also allowed participants to retain 

more assets than usually allowed in states’ Medicaid programs. Of the 12 

states, 7 states set asset limits that ranged from $10,000 to $30,000 for 

individuals, couples, or both. Three states— Missouri, Indiana, and 

Arkansas—opted for asset requirements of $4,000 or less for an 

individual,16 while the remaining two states—Washington and Wyoming—

imposed no asset limits. 

Table 3: Enrollment and Eligibility Characteristics of 12 States With Ticket to Work Medicaid Buy-In Programs 

State Enrollmenta Buy-In start date Income limit as a percentage of FPLb Asset limitsc

Missouri 8,461 July 2002 250% $999.99 individuald

Minnesota 6,178 July 2001eNo limit $20,000 individual

Indiana 3,318 July 2002 350% $2,000 individual;

$3,000 couple

Connecticut 2,433 Oct. 2000 $6,250 monthly gross income, 

or $3,082 monthly net incomef

$10,000 individual;

$15,000 couple

Pennsylvania 1,325 Jan. 2002 250% $10,000 couple

New Hampshire 968 Feb. 2002 450% $20,000 individual;

$30,000 couple

New Jersey 551 Feb. 2001 250% (earned) and 

100% (unearned) 

$20,000 individual;

$30,000 couple

Kansas 489 July 2002 300% $15,000 couple

Illinois 323 Jan. 2002 200% $10,000 individual;

$10,000 couple

Washington 144 Jan. 2002 220% No limit

Arkansas 65 Feb. 2001 250% $4,000 individual;

$6,000 coupleg

Wyoming 3 July 2002 100% No limit

Source: State-reported data. 

Note: GAO analysis of state-reported data, as of December 2002. 

a

States’ enrollment data represent either the number of participants enrolled on a specific day in 

December 2002 or the total number who were ever enrolled during that month. Also, some states 

included individuals who were retroactively enrolled for that month. 

 16Indiana set asset requirements for a couple at $3,000, while Missouri allowed the spouse 

of a Buy-In participant to retain assets up to $100,000 and excluded one-half of the 

participant’s marital assets. 
Page 18 GAO-03-587 Medicaid and Ticket to Work 

b

In 2002, the FPL for an individual was $8,860 annually; for a family of three, the FPL was $15,020. 

Not all income is counted in order to calculate “countable” income. Income exclusions include $20 per 

month of most income, $65 per month of wages and one-half of wages over $65, food stamps, and 

home energy and housing assistance. 

c

Not all assets are counted in order to calculate “countable” assets. Assets excluded are the home a 

person lives in; a car, depending on its use or value; certain burial spaces and burial funds up to 

$1,500; and life insurance with a face value of up to $1,500. 

d

Missouri allowed the spouse of an individual with disabilities to retain assets up to $100,000 and 

excluded one-half of the participant’s marital assets. 

e

Minnesota originally opted to cover workers with disabilities through the BBA option, implemented in 

July 1999, and amended its program to follow Ticket to Work Buy-In requirements. 

f

Connecticut uses a two-step method that is not based on the FPL to determine income eligibility. 

First, an applicant’s individual gross income must be $6,250 a month or less ($75,000 maximum per 

year). If the applicant’s income is higher than $6,250, the state applies a second test whereby the SSI 

income disregards and impairment-related work expenses are excluded; if an individual’s adjusted 

income (after applying these exclusions) is less than or equal to $3,082 per month, the individual is 

income-eligible for the Medicaid Buy-In. 

g

Arkansas increases the asset limit by $200 for each additional family member. 

States generally allowed Ticket to Work participants to exclude certain 

assets from the asset limits. In addition to excluding the value of certain 

assets that applied to most individuals with disabilities in the Medicaid 

program when determining eligibility,17 10 of the 12 states allowed Buy-In 

participants to save money in retirement accounts such as Individual 

Retirement Accounts, Keoghs, and 401(k)s; medical savings accounts; or 

special accounts that allow individuals to save for expenses such as 

modifications for job or home and education costs. These accounts are not 

considered when determining asset limits for participants. Two states—

Arkansas and Indiana—set $10,000 and $20,000 limits, respectively, on the 

amount of savings participants can accumulate in these accounts. State 

officials in a few states said allowing participants to exclude these 

retirement accounts and other assets helped support states’ goals of 

affording working individuals with disabilities greater independence and 

self-sufficiency. For example, under these rules, participants can save to 

buy cars or homes and can set aside money for retirement. 

 17For example, a home, personal property, one vehicle under certain conditions, a burial 

space, and life insurance valued at up to $1,500 are disregarded for individuals applying for 

Medicaid. 
Page 19 GAO-03-587 Medicaid and Ticket to Work 

In most of the 12 states, the Buy-In programs were especially beneficial for 

DI-eligible individuals who, in contrast to most SSI individuals, were not 

always eligible for Medicaid coverage. Prior to the Ticket to Work 

legislation, DI individuals in 11 of the 12 states could qualify for Medicaid 

by spending down their incomes to specified levels (Wyoming did not offer 

a spend-down option).18 In these 11 states, the spend-down income 

eligibility levels ranged from 15 percent to 100 percent of the FPL. Under 

the new Buy-In programs, the income eligibility levels significantly 

exceeded those established under the spend-down categories (see fig. 2), 

thus allowing individuals to qualify for the Medicaid Buy-In directly—

rather than spending down their incomes to qualify for Medicaid coverage. 

For example, an individual receiving DI in Arkansas could obtain Medicaid 

coverage through the Buy-In program with an income up to 250 percent of 

the FPL; prior to the Buy-In, the individual would have had to incur 

medical expenses that reduced his or her income to approximately 15 

percent of the FPL in order to qualify for the spend-down category of 

Medicaid. This allows an individual with disabilities in Arkansas to 

maintain an income of up to $22,150 per year under the Buy-In, whereas 

that person would have had to spend down to an income of $1,300 a year 

to qualify for Medicaid. 

 18States may offer spend-down coverage through an optional medically needy eligibility 

category. However, 209(b) states that do not offer a medically needy eligibility category 

must allow individuals who are aged, blind, or disabled (including SSI and DI individuals) 

to spend down their incomes, using their incurred medical expenses, to meet the 209(b) 

category income eligibility requirements. 

Buy-In Programs May 

Offer Greatest Benefit to 

DI Participants 
Page 20 GAO-03-587 Medicaid and Ticket to Work 

Figure 2: Twelve States’ Medicaid Buy-In, SSI Work Incentive, and Spend-Down Income Eligibility Levels, as a Percentage of 

the FPL 

71

100

71

438

286

76

277

200

350

300

231

250

Spend downc

SSI work incentiveb

Buy-In

Source: State-reported data, SSA data on SSI work incentive, and Kaiser Family Foundation data on spend down.

Arkansas

Indiana

Kansas

Illinois

Connecticut

311

70

350

Minnesota

15

Percentage of FPL

0

50

100

150

200

250

300

350

400

450

500 (Note a

) (No limit)
Page 21 GAO-03-587 Medicaid and Ticket to Work 

Note: GAO analysis of states’, SSA’s, and the Kaiser Family Foundation’s data, as of 

December 2002. 

a

Connecticut uses a two-step method that is not based on the FPL to determine Medicaid Buy-In 

income eligibility. First, an applicant’s individual gross income must be $6,250 a month or less 

($75,000 maximum per year). If the applicant’s income is higher than $6,250, the state applies a 

second test whereby SSI income disregards and impairment-related work expenses are excluded; if 

an individual’s adjusted income (after applying these exclusions) is less than or equal to $3,082 per 

month, the individual is income-eligible for the Medicaid Buy-In. 

b

SSI’s work incentive program, known as Section 1619(b), 42 U.S.C. 1382h(b), provides for continued 

Medicaid eligibility for individuals whose incomes are too high to qualify for an SSI cash payment but 

are not high enough to offset the loss of Medicaid or publicly funded attendant care. 

76

55 63

74 78

443

300

242

227

215

250

450

250 250

100

Washington

Wyomingd

Pennsylvania

New Jersey

New

 Hampshire

Missouri

220

278
Page 22 GAO-03-587 Medicaid and Ticket to Work 

c

Spend-down refers to two approaches to Medicaid eligibility. First, most states offer spend-down 

coverage through their medically needy category of eligibility, where individuals deduct incurred 

medical expenses from their income to spend down into Medicaid coverage. Second, 209(b) states 

that use their 1972 state assistance eligibility rules in determining Medicaid eligibility for individuals 

with disabilities must allow individuals who are aged, blind, or disabled (including SSI and DI 

individuals) to spend down their incomes by incurred medical expenses, regardless of whether they 

offer a medically needy eligibility category in Medicaid. Of the six 209(b) states with Ticket to Work 

Medicaid Buy-In programs, two states—Indiana and Missouri—do not offer medically needy 

coverage, but these states must allow individuals with disabilities to spend down into Medicaid. 

d

Wyoming does not provide a spend-down option. 

Buy-In programs afforded DI beneficiaries more immediate—and 

sometimes expanded—Medicaid coverage. In addition to relieving 

individuals of the requirement to spend down their income to qualify for 

Medicaid, DI individuals, who are not entitled to receive Medicare 

coverage until they have been receiving DI cash benefits for 24 months, 

also received more immediate health insurance coverage through the 

Medicaid Buy-In. Buy-In participants may also have access to a more 

expanded benefit package than individuals who receive Medicaid through 

a state’s medically needy program.19

However, when considering participation in the Buy-In program, DI 

beneficiaries must weigh the benefits of the higher earnings allowed under 

the program against the possible loss of DI cash benefits and Medicare 

coverage if their earnings increase beyond a certain threshold. 

Specifically, after a 9-month trial work period and a 36-month extended 

period of eligibility, if a DI beneficiary’s earnings increase over the SGA 

limit in any month, the individual loses DI eligibility entirely. Additionally, 

DI beneficiaries who earn more than the SGA level after the initial 9-month 

trial period could lose Medicare coverage after 8-1/2 years. The loss of 

entitlement for Medicare may be of concern for those individuals with 

disabilities who would not reach age 65 by the end of the 8-1/2-year time 

 19States may offer different sets of benefits depending on whether an individual’s eligibility 

for Medicaid is considered mandatory or optional by federal statute; optional benefits may 

vary by state. Most adults with disabilities who receive SSI payments have mandatory 

coverage under Medicaid, while individuals who are medically needy (and spend down to 

receive Medicaid benefits) are considered to be in the optional category. Thus, adults with 

disabilities who move from medically needy coverage to the Medicaid Buy-In may receive 

additional benefits, depending on states’ coverage policies. 
Page 23 GAO-03-587 Medicaid and Ticket to Work 

period.20 To the extent that a state reduced its Medicaid Buy-In eligibility 

level, or discontinued its Buy-In program, these former DI-eligible Buy-In 

participants could potentially be without health care coverage until they 

reached age 65. 

In contrast, SSI beneficiaries have different considerations than those 

weighed by DI beneficiaries in deciding whether to enroll in the Medicaid 

Buy-In program. Most SSI beneficiaries were assured eligibility for 

Medicaid and thus did not need the Buy-In program or to spend down their 

incomes in order to qualify for Medicaid. SSI beneficiaries in Medicaid 

would receive the same benefit package as those in a Buy-In program. 

Even SSI beneficiaries who worked could remain eligible for Medicaid as 

participants in a work incentive program, which allowed individuals to 

increase their incomes while maintaining their Medicaid coverage. In 5 of 

the 12 states, Buy-In income eligibility levels were lower than the Medicaid 

eligibility levels for individuals in the SSI work incentive program, and 

Buy-In eligibility levels only slightly exceeded those for the SSI work 

incentive beneficiaries in another 5 states. Additionally, beneficiaries in 

SSI’s work incentive program are not subject to premium payments in 

Medicaid, while Buy-In programs generally have imposed premium 

requirements for participants. 

States may require Buy-In participants to share in the cost of their health 

care coverage. All 12 states adopted cost-sharing mechanisms, primarily 

premiums or copayments, for Buy-In participants. States calculated 

premiums for Buy-In participants using various methods. For example, 

Pennsylvania and Washington set premiums as a percentage of allowable 

income, while Indiana and Kansas established varying premium levels for 

different incomes. (See table 4.) Generally, states assessed premiums 

when income was at 100 percent of the FPL or higher. Among states that 

charged premiums in 2002, the percentage of participants whose incomes 

were high enough to be charged premiums varied significantly across the 

 20Under section 1818A of the Social Security Act, a disabled individual who has lost 

entitlement to premium-free Medicare part A solely because of SGA may be able to enroll 

in part A as long as the disability continues. The individual is responsible for paying the 

premiums. Furthermore, an individual who has lost his or her benefits under DI due to 

earning more than SGA and who then fails to earn at least SGA due to being disabled, could 

be eligible for reinstatement of his or her DI benefits and Medicare coverage. Section 112 of 

the Ticket to Work legislation allows certain previously entitled individuals to request 

expedited reinstatement of disability benefits under title II and title XVI when their 

disabling impairment no longer permits them to perform SGA. 

All States’ Buy-In 

Programs Required Cost 

Sharing 
Page 24 GAO-03-587 Medicaid and Ticket to Work 

states, from 12 percent of participants in Connecticut to all or nearly all 

participants in Illinois, Pennsylvania, Washington, and Wyoming. Average 

monthly premiums ranged from $26 to $82, with nearly half of the states 

setting premiums from $40 to $60. Two states—Arkansas and New 

Jersey—did not charge premiums as of December 2002. Stating that 

premiums were difficult to administer and collect, Arkansas chose not to 

impose a premium requirement. New Jersey has a premium requirement 

for participants with incomes greater than 150 percent of FPL; however, 

the state did not assess premiums because only about 5 percent of 

beneficiaries owed a payment. 
Page 25 GAO-03-587 Medicaid and Ticket to Work 

Table 4: Twelve States’ Premium Requirements for Ticket to Work Medicaid Buy-In Programs 

State 

Percentage of 

FPL at which 

state assesses 

premiums 

Monthly premium 

Participant’s 

average 

monthly 

premium 

Percentage of 

participants 

charged 

premiums

Arkansasa N/A N/A N/A N/A

Connecticut 200% 10% of family’s income that exceeds 200% of the FPL 

for the appropriate family size; not to exceed 7.5% of 

net family income for families with incomes less than 

450% of the FPL. Family includes the participant and 

his or her spouse.b

$50c

 12%

Illinois 100% 24 premium levels based on the participant’s earned 

and unearned income, ranging from $6 to $100. 

Premiums increase as income increases. 

$48 99.7%

Indiana 150% Six premium levels based on the participant’s income, 

ranging from $48 to $187, and six premium levels 

based on participant’s and spouse’s income, ranging 

from $65 to $254. Premiums increase as income 

increases. 

$82c

 22%

Kansas 100% Eight premium, levels based on the participant’s 

income, ranging from $55 to $152, and eight premium 

levels, based on participant’s and spouse’s income, 

ranging from $74 to $205. Premiums increase as 

income increases. 

$68 57%

Minnesota 100% Premium begins at 1% of income and the percentage of 

the premium increases as income increases, up to a 

premium of 7.5% of participant’s income. 

$57 77%

Missouri 150% Four premium levels, ranging from approximately $48 

to $123. Premiums increase as income increases. 

d 16%

New Hampshire 150% Six premium levels, ranging from $80 to $220. 

Premiums increase as income increases. 

$26e 15%

New Jersey f f f f 

Pennsylvania N/A 5% of countable income (premiums under $10 are not 

collected). 

$43 95%

Washington N/A The lesser of 

50% of unearned income above $571, plus 5% of total 

unearned income, plus 2.5% of earned income minus 

$65, or 

(2) 7.5% of total income. 

$70 100%

Wyoming N/A 7.5% of earned income plus 7.5% of unearned income 

over $600 per year. 

$44 100%

Source: State-reported data. 

Legend: N/A = not applicable 

Note: GAO analysis of state data, as of December 2002. 

a

Arkansas’ Medicaid Buy-In program did not impose premiums. 

b

The FPL calculation is dependent upon family size. For example, 100 percent of the FPL for an 

individual in 2002 was $8,860 annually, while 100 percent of the FPL for a family of three was 

$15,020. 
Page 26 GAO-03-587 Medicaid and Ticket to Work 

c

State reduces a participant’s premium liability by any amount the participant pays for employersponsored coverage. 

d

Missouri does not collect data on average monthly premiums. 

e

Although premiums in New Hampshire begin at $80 per month, nearly half of the participants have 

premiums reduced because the state allows deductions for the costs of premiums that participants 

pay for Medicare and employee-sponsored health insurance for family members. 

f

New Jersey has a premium requirement for participants with incomes greater than 150 percent of 

FPL; however, as of December 31, 2002, the state was not assessing premiums because only about 

5 percent of beneficiaries owed a payment. 

Three states—Connecticut, Indiana, and New Hampshire—reported 

discounting the Buy-In premium if participants also paid premiums for 

Medicare part B, for employer-sponsored insurance coverage, or for 

individual insurance coverage. For example, New Hampshire deducted the 

Medicare part B premium from a participant’s total Buy-In premium. If a 

Buy-In participant were paying a Medicare part B premium of $54 a month, 

his or her Medicaid Buy-In premium would be discounted by that amount. 

Thus, if a participant’s Buy-In premium were $80 a month, the monthly 

premium for the Buy-In program would be discounted to $26 a month. In 

Connecticut, any amount that participants pay for Medicare part B 

premiums, employer-sponsored coverage, or other out-of-pocket medical 

insurance is deducted from their premium liability. For example, if a 

participant owes a Buy-In premium of $100 a month and also is paying an 

employer $80 a month for private coverage, the individual’s Buy-In 

premium liability would be reduced to $20. 

Participants in 8 of the 12 states also were required to pay copayments for 

health care services, such as $0.50 to $3 for an office visit or prescription 

drugs. Copayments for inpatient hospital care generally varied from $3 per 

day in Illinois to $48 per hospital stay in Kansas. In 7 of these states, 

copayments were the standard cost-sharing requirements for Medicaid. 

The remaining state—Arkansas—imposed a two-level copayment system 

for participants. Arkansas Buy-In participants with incomes below 100 

percent of the FPL had the same copayment requirements and were 

charged the same amounts for pharmacy and inpatient hospital services as 

usually prescribed under the state’s Medicaid program. Participants with 

incomes of 100 percent of the FPL or greater were charged additional 

copayments for services and equipment such as physician services ($10 

per visit), outpatient mental and behavioral health services ($10 per visit), 

and prosthetic devices (10 percent of the maximum Medicaid payment). 
Page 27 GAO-03-587 Medicaid and Ticket to Work 

In the four states in which we conducted more detailed work—

Connecticut, Illinois, Minnesota, and New Jersey—Buy-In programs 

enrolled many individuals who previously were enrolled in Medicaid, often 

in eligibility categories with more restrictive income limits, such as the 

medically needy category. Buy-In participants in the four states generally 

also had Medicare coverage. Across the four states, few Buy-In 

participants had coverage from private insurance at the time of their 

enrollment in the Medicaid Buy-In programs. Based on the limited 

participation in private insurance, officials in several states did not believe 

that “crowd-out”—the substitution of newly available public coverage for 

private health insurance—was a concern for the Medicaid Buy-In 

programs. The limited employment information available for participants 

from two of the four states—Connecticut and Minnesota—showed that 

Buy-In participants generally were employed in low-wage jobs—many 

making less than the SGA threshold, which at the time was $780 per 

month. These four states, however, had little information regarding the 

extent to which the Buy-In programs fostered employment among 

individuals with disabilities. 

Across these four states, the share of Buy-In participants with previous 

Medicaid coverage was 53 percent in Connecticut, 81 percent in Illinois, 61 

percent in Minnesota, and 58 percent in New Jersey. Whereas previous 

Medicaid coverage was largely due to eligibility through spend-down 

provisions, Buy-In participation allowed them to retain more of their 

income or assets and still qualify for Medicaid. Of those who switched 

from existing Medicaid coverage to the Buy-In program, Illinois and 

Minnesota estimated that 79 percent and 51 percent of participants, 

respectively, were beneficiaries who originally had spent down their 

income to qualify for Medicaid. While not offering a specific estimate, a 

New Jersey official indicated that most of the Buy-In participants who 

were enrolled in Medicaid before switching to the Buy-In category also 

had spent down their income to qualify for Medicaid. Buy-In eligibility was 

particularly beneficial for individuals in New Jersey because the state’s 

Medicaid coverage for medically needy beneficiaries did not include 

prescription drugs or community-based long-term care services, both of 

which were covered under the Buy-In. 

Buy-In Participants in 

Four States Generally 

Had Prior Medicaid 

Coverage and Worked 

in Low-Wage Jobs 

Buy-In Participants Often 

Had Previous Coverage 

under Medicaid and 

Medicare 
Page 28 GAO-03-587 Medicaid and Ticket to Work 

In three of the four states—Connecticut, Minnesota, and New Jersey—

more than 80 percent of Buy-In participants also received health care 

coverage through Medicare.21 (See table 5.) State officials reported that 

those with Medicare relied on the Medicaid Buy-In for purposes of 

obtaining outpatient prescription drug coverage since Medicare generally 

does not cover this benefit. Few participants—less than 10 percent of 

participants in any of the four states—reported having employersponsored coverage at the time of their enrollment into the Medicaid BuyIn programs. For example, Connecticut, which requires Buy-In applicants 

who have access to employer-sponsored insurance coverage to apply for 

this coverage, found that less than 6 percent of Buy-In applicants had 

health care coverage through their workplace. For Buy-In participants 

with private health insurance coverage, which often has more limited 

benefits than those covered by Medicaid, the Buy-In can serve as a “wrap 

around” to private coverage by providing such services as home health and 

personal care, and items such as durable medical equipment.22

 21Illinois was unable to identify Buy-In participants who had Medicare. 

22Medicaid-eligible individuals enrolled in employer-sponsored health plans are entitled to 

receive full Medicaid benefits. The health plans become the primary payers for the services 

they cover. States must provide coverage for those Medicaid services not included in the 

employer plans. 
Page 29 GAO-03-587 Medicaid and Ticket to Work 

Table 5: Number of Buy-In Participants Reporting Other Sources of Health Care 

Coverage in Four States 

Participants with other sources of coveragea

 

(percentage of total enrollment) 

State Medicare 

Employersponsored 

coverage Otherb

 

Connecticut 1,870 (82%) 128 (5.6%) 34 (1.5%)

Illinois c 4 (1.6%) 3 (1.2%)

Minnesota 5,394 (90%)d 459 (7%)e 367 (6%)e

New Jersey 408 (82%) 38 (7.3%) 8 (1.5%)

Source: State-reported data. 

Note: GAO analysis of state data, as of December 2002. 

a

These categories are not mutually exclusive, as individuals may have more than one source of 

coverage. 

b

“Other” may include coverage held through a spouse or other family member, or Medicare 

supplemental coverage. Most Medicare beneficiaries purchase Medicare supplemental coverage 

(known as Medigap) to protect themselves against large out-of-pocket costs and help fill Medicare’s 

coverage gaps. 

c

Illinois was unable to identify Buy-In participants who had Medicare. 

d

Minnesota’s Medicare data are as of September 2002. 

e

Minnesota’s employer-sponsored and other coverage data are as of December 2001. 

According to officials in several states, crowd-out was not a concern for 

Buy-In programs because most participants did not report having private 

health insurance coverage at the time of their enrollment into the Medicaid 

Buy-In programs. For example, Minnesota and New Jersey state officials 

said they did not view crowd-out as a significant issue for this population 

because many of the participants worked part-time and were rarely 

offered private insurance coverage. Additionally, both Minnesota and 

Connecticut required individuals to either enroll or remain enrolled in 

employer-sponsored coverage if it was offered. As of December 2002, 

these states had not formally analyzed whether Buy-In participants 

withdrew from private health insurance coverage prior to obtaining 

Medicaid coverage. New Jersey officials plan to monitor whether 

employees are deciding to or are being urged to pursue the Buy-In 

program rather than their employer-sponsored coverage. 
Page 30 GAO-03-587 Medicaid and Ticket to Work 

In the three states with data available, working individuals with disabilities 

who qualified for the Medicaid Buy-In program generally worked in lowwage jobs. (See table 6.) While one purpose of the Ticket to Work 

legislation was to enable individuals with disabilities to reduce their 

dependency on federal cash benefit programs through earnings from 

work, available data from Connecticut, Illinois, Minnesota showed that 

few participants earned more than the SGA limit, which was $780 in 

December 2002. Sixty-four percent of participants in Connecticut, 61 

percent of participants in Illinois, and 77 percent of participants in 

Minnesota had earned income well below the SGA limit. None of these 

states had asked participants to identify their occupation or the industry in 

which they were employed on their Medicaid Buy-In applications; 

however, some states may conduct broader analyses of participants’ 

employment as part of required evaluations under a related Ticket to Work 

grant program.23

 23Section 203 of the Ticket to Work and Work Incentives Improvement Act of 1999 

authorized the Medicaid Infrastructure Grant Program, which is an 11-year grant program 

beginning in fiscal year 2001 ($150 million for the first 5 years) that allows states to design, 

establish, and operate state “infrastructures” to facilitate the competitive employment of 

individuals with disabilities. Grant activities include (1) implementing Medicaid Buy-In 

programs, (2) developing demonstration programs that offer the ability to purchase 

Medicaid coverage for people with a severe impairment who do not yet meet the SSI 

disability test, (3) making significant improvements to Medicaid services that support 

people with disabilities in their competitive employment efforts, and (4) creating regional 

technical assistance centers for health care improvements supporting employment—

known as State-to-State Medicaid Infrastructure Partnerships. As of December 2002, thirtyeight states received Infrastructure Grants, including 10 of the 12 states with Medicaid BuyIn programs (all except Arkansas and Indiana). Indiana was awarded an Infrastructure 

Grant in 2003. 

Available Employment 

Information Shows 

Participants Worked in 

Low-Wage Jobs and 

Experienced Minimal 

Increases in Earnings 
Page 31 GAO-03-587 Medicaid and Ticket to Work 

Table 6: Average Monthly Income for Ticket to Work Buy-In Participants in Four 

States 

State 

State-reported categories 

of average monthly 

income from earnings 

Percentage of 

participantsa

Connecticutb $200 or less 

$201-$600 

$601-$800 

$801 and greater 

23 

41 

17 

19 

Illinois $200 or less 

$201-$599 

$600-$799 

$800 and greater 

12 

49 

23 

17 

Minnesota Less than $200 

$200-$599 

$600-$799 

$800 and greater 

36 

41 

12 

10 

New Jersey c c 

Source: State-reported data. 

Note: GAO analysis of state data, as of December 2002. 

a

Percentages may not add to 100 due to rounding. 

b

Connecticut’s data on earned income are from 2001. 

c

State did not provide these data. 

Two of the four states we reviewed could identify whether participants 

had increased their earnings once enrolled in the Buy-In. Forty percent of 

Minnesota participants and 28 percent of Connecticut participants 

increased their earnings between the time of initial enrollment and 

December 2001, the most recent date for which these data were available.24

Average monthly increases over previous earnings were $306 in Minnesota 

and $332 in Connecticut. New Jersey and Illinois were not able to provide 

this information. Minnesota found that 64 percent of those in the state’s 

Buy-In program as of December 2001 earned wages for at least one 3-

month period in the 2-year period prior to enrollment.25 Minnesota officials 

 24Connecticut officials said that as a part of their state’s Infrastructure Grant, their primary 

research question will be to determine whether the Medicaid Buy-In, along with other 

factors such as participation in vocational rehabilitation and a new benefits counseling 

program, leads to increases in earnings among participants. 

25Minnesota officials used data collected by the state’s Department of Economic Security 

from employers who report information on employees who pay federal taxes. 
Page 32 GAO-03-587 Medicaid and Ticket to Work 

cautioned that the analysis was limited by the lack of detail in the state 

database; for example, they did not know whether participants were 

disabled during this entire period, or whether individuals were 

consistently employed. 

We provided a draft of this report for comment to CMS and the 12 states in 

our sample. In its comments, CMS said that, in addition to the states with 

existing BBA and Ticket to Work Buy-In programs, at least three more 

states are planning to implement a Medicaid Buy-In program within the 

coming year, which would result in over half of the states offering health 

insurance to workers with disabilities. CMS noted that the expansion of 

Medicaid coverage to these individuals is encouraging particularly because 

states are experiencing fiscal budget constraints. CMS also said that it is 

collecting information on Medicaid Buy-In participants’ earnings and 

Medicaid costs for the first 2 years of operation. In addition, CMS expects 

to complete an extensive study of states’ experiences for 2001 and 2002 

with the Buy-In programs authorized under both the BBA and the Ticket to 

Work and Work Incentives Improvement Act of 1999 in the fall of 2003 and 

to report its findings in 2004. 

CMS also suggested that, in view of general concerns over racial 

disparities and access to care in rural areas, it might be helpful for us to 

comment on these demographic factors as part of our findings. We did not 

include these factors in our scope of work, even for the four states where 

we did more detailed work, and therefore cannot comment on them. CMS 

provided technical comments, which we have incorporated as appropriate. 

The full text of CMS’s written comments appears in appendix II. 

Eleven of the 12 states responded with technical comments, which we 

incorporated where appropriate. 

We will send copies of this report to the Administrator of the Centers for 

Medicare & Medicaid Services and other interested parties. We also will 

make copies available to others upon request. In addition, the report will 

be available at no charge on the GAO Web site at http//www.gao.gov. 

Agency and State 

Comments 
Page 33 GAO-03-587 Medicaid and Ticket to Work 

If you or members of your staffs have any questions regarding this report, 

please contact me on (202) 512-7118 or Carolyn Yocom at (202) 512-4931. 

Other major contributors to this report were Catina Bradley, Karen Doran, 

Kevin Milne, and Elizabeth T. Morrison. 

Kathryn G. Allen 

Director, Health Care—Medicaid 

 and Private Health Insurance Issues 
Appendix I: Methodology for Developing 

Estimates and Characteristics of Working-Age 

Individuals with Disabilities 

Page 34 GAO-03-587 Medicaid and Ticket to Work 

To develop a national estimate and compare the characteristics of 

working-age individuals with disabilities with those for working-age 

individuals in the rest of the population, we analyzed data available from 

the Medical Expenditure Panel Survey (MEPS) household component, 

which provides data on individuals’ demographics, employment, health 

characteristics, and medical spending. 

MEPS, conducted by the Agency for Healthcare Research and Quality 

(AHRQ), consists of four surveys and is designed to provide nationally 

representative data on health care use and expenditures for U.S. civilian 

noninstitutionalized individuals. For our analysis, we used one of the four 

surveys—the Household Component. The Household Component is a 

survey of individuals regarding their demographic characteristics, health 

insurance coverage, and health care use and expenditures. The 1997 and 

1998 versions of the MEPS Household Component were the most recently 

available at the time of our analysis that had both (1) a pooled estimation 

file published by AHRQ that allows pooling 2 or 3 years of data, and (2) 

complete demographic, health insurance, and health care expenditure 

data. We pooled data from 1997 and 1998 in order to increase our sample 

sizes for individuals with disabilities. Using the Medical Care Consumer 

Price Index from the Bureau of Labor Statistics, we inflated 1997 medical 

care expenditures to 1998 values. 

Our estimate of working-age individuals with disabilities includes 

individuals aged 16 to 64 with one or both of these conditions: (1) needing 

help or supervision in performing activities of daily living (ADL) or 

instrumental activities of daily living (IADL) because of an impairment or a 

physical or mental health problem1

 or (2) being completely unable to work 

at a job, do housework, or go to school. 

Our analyses of working-age individuals with disabilities are based on a 

sample size of 1,680, representing a population of 6.68 million individuals 

with disabilities. Table 7 shows the unweighted and weighted sample sizes 

on which our analyses are based. 

 1

MEPS identifies ADLs as basic physical activities such as bathing, dressing, or getting 

around the house and identifies IADLS as cognitive or social functions such as using the 

telephone, paying bills, taking medications, preparing light meals, doing laundry, or going 

shopping. MEPS offers a relatively expansive definition of disability in that it does not 

distinguish the number of ADLs or IADLs with which an individual may require assistance. 

Appendix I: Methodology for Developing 

Estimates and Characteristics of WorkingAge Individuals with Disabilities 
Appendix I: Methodology for Developing 

Estimates and Characteristics of Working-Age 

Individuals with Disabilities 

Page 35 GAO-03-587 Medicaid and Ticket to Work 

Table 7: MEPS Sample and Estimated Population Sizes, 1997 and 1998 

Individuals with 

disabilities aged 16-64 

Rest of the general 

population aged 16-64

Sample size (unweighted) 1,680 32,068

Estimated population size 

(weighted) 6,682,106 166,509,028

Source: Agency for Healthcare Research and Quality. 

Note: GAO’s analysis of AHRQ’s MEPS household component, 1997 and 1998. 
Appendix II: Comments from the Centers for 

Medicare & Medicaid Services 

Page 36 GAO-03-587 Medicaid and Ticket to Work 

Appendix II: Comments from the Centers for 

Medicare & Medicaid Services 
Appendix II: Comments from the Centers for 

Medicare & Medicaid Services 

Page 37 GAO-03-587 Medicaid and Ticket to Work 

 

(290189) 
The General Accounting Office, the audit, evaluation and investigative arm of 

Congress, exists to support Congress in meeting its constitutional responsibilities 

and to help improve the performance and accountability of the federal 

government for the American people. GAO examines the use of public funds; 

evaluates federal programs and policies; and provides analyses, 

recommendations, and other assistance to help Congress make informed 

oversight, policy, and funding decisions. GAO’s commitment to good government 

is reflected in its core values of accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost is 

through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and fulltext files of current reports and testimony and an expanding archive of older 

products. The Web site features a search engine to help you locate documents 

using key words and phrases. You can print these documents in their entirety, 

including charts and other graphics. 

Each day, GAO issues a list of newly released reports, testimony, and 

correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site 

daily. The list contains links to the full-text document files. To have GAO e-mail 

this list to you every afternoon, go to www.gao.gov and select “Subscribe to daily 

E-mail alert for newly released products” under the GAO Reports heading. 

The first copy of each printed report is free. Additional copies are $2 each. A 

check or money order should be made out to the Superintendent of Documents. 

GAO also accepts VISA and Mastercard. Orders for 100 or more copies mailed to a 

single address are discounted 25 percent. Orders should be sent to: 

U.S. General Accounting Office 

441 G Street NW, Room LM 

Washington, D.C. 20548 

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm 

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202) 512-4800 

U.S. General Accounting Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548 

GAO’s Mission 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Mail or Phone 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Public Affairs